Ex-Comverse CFO Pleads Guilty in Options Backdating Case

October 24, 2006 (PLANSPONSOR.com) - David Kreinberg, former chief financial officer of Comverse Technology, has entered a guilty plea to securities fraud allegations and agreed to cooperate with authorities.

The Wall Street Journal said Kreinberg’s federal court plea entered Tuesday represented the first in the widespread securities regulators’ investigation into an options backdating scandal that has already put more than 100 companies under the microscope.

class=”times”> Kreinberg and William Sorin, Comverse’s former senior general counsel, have been engaged in plea discussions with federal prosecutors, according to court papers. Kreinberg and Sorin were charged in August with conspiracy to commit mail fraud, securities fraud and wire fraud in the alleged scheme to improperly backdate stock options at the New York software company (See Comverse Execs Face Fraud Charges for Options Backdating ). The two men surrendered in New York in August and were released on $1 million bond each.

class=”times”> Meanwhile, American officials on Monday filed an extradition request in Namibia for Jacob “Kobi” Alexander, the former head of Comverse. Alexander was taken into custody in September in Namibia following an international manhunt. He was released on bail by a magistrate judge and is reported living in the Namibian capital of Windhoek.

class=”times”> Alexander, an Israeli citizen and permanent resident of the US, faces a 35-count indictment that includes charges of securities fraud, money laundering and bribery.

class=”times”> According to the media report, prosecutors are seeking the forfeiture of about $138 million of Alexander’s assets as well as two Manhattan apartments, according to court documents.

class=”times”> The government alleges   Alexander used fictitious names to generate hundreds of thousands of backdated options, which were parked in a “secret slush fund” named I.M. Fanton, after “The Phantom of the Opera,” according to the indictment against Alexander.